The Bank of Thailand is working to allow virtual banks to operate in the country, with fully functional operations and services by 2025. The bank’s report “Consultation Paper on Virtual Bank Licensing Framework” said applications for virtual banks will be available later in 2023.
Virtual banks will act as financial service providers, with a focus on increasing competition and boosting Thailand’s economic growth. The Bank of Thailand will offer three different licenses for interested companies by next year. The report said they have 10 parties interested in granting permissions. It highlighted that regulations and supervision for virtual banks will be the same as those for traditional commercial banks under the licensing framework. Interested institutes need to meet certain requirements.
The Bank of Thailand said virtual banks should not initiate a race to the bottom through irresponsible lending, give preferential treatment to related parties, do not abuse dominant market position which will pose risks to financial stability, depositors and consumers as well. The virtual banks in Thailand will be under a restricted phase during the first years of operation. They will be closely monitored to prevent financial systemic risks.
Moreover, the country’s Securities and Exchange Commission plans to tighten rules for crypto. The regulator will expand investor protection and impose a strict set of guidelines for crypto ads. The Southeast Asian country recently entered into a technology cooperation agreement with Hungary to support the adoption of blockchain technology amid the rapid adoption and demand of mobile payments, e-commerce, and cryptocurrencies.